Merger Negotiation with General Dynamics

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Paper 1: Merger Negotiation with General Dynamics ASCM 628 You are the Director in charge of corporate negotiations for Lockheed-Martin. You are in potential merger discussions with arch-rival General Dynamics. Pending Federal Trade Commission (FTC) approval of this merger, discuss: 1. Two key negotiation fundamentals that you will employ and explain why these fundamentals are essential for this pending merger discussion. As the Director in charge of corporate negotiations for Lockheed-Martin, I would employ different negotiation techniques at different times in the negotiation. I would make sure when starting the negotiation, I sequence the issues carefully. Many times, getting agreement on several smaller matters can start the ball rolling and build support between the parties helping to overcome larger issues down the road. However, I would also be cautious not to leave all of the complex or controversial issues for last because this may deadlock the deal towards the end, leaving negotiations at a stalemate. (Lewicki, et al., 2010, pg. 100-101) According to Lax and Sebenius (2012), “Most big deals are built on a series of smaller ones.” Their article, Deal Making 2.0, A Guide to Complex Business Negotiations in the Harvard Business Review, discusses the $33 million merger of Mittal Steel’s takeover of Arcelor, Europe’s largest steel company. Arcelor and his board of directors were strongly opposed to the merger when approached by Mittal Steel, however, Lakshmi Mittal, founder of Mittal Steel undertook a strategy to make multiple, smaller financial and political agreements in the beginning. This allowed them to build sufficient support to overcome and even convert potential blockers. Sequencing issues can play a key role in the overall success of the negotiations. I would also propose to take a break when needed. This might just

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